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Textainer profit up 35pc to US$54 million as revenue increases 9pc

TEXTAINER Group Holdings Limited posted a 35 per cent year on year increase in third quarter net profit to US$54.3 million, drawn on revenues of $144.5 million, up nine per cent.

Year-to-date net profit increased seven per cent to $146.9 million drawn on revenues of $419.4 million over the same period, the Bermuda-based company said.

"Our adjusted net income includes $7.9 million received from a settlement with a lessee in bankruptcy proceedings," said Textainer president and CEO Philip Brewer.

"Excluding these proceeds, our adjusted net income would have been $42.4 million or a year-to-year increase of 6.5 per cent," he said.

"Now prices continue to depress used container prices resulting in reduced gains on sales and trading profits. We believe container prices are near the cost of production and interest rates cannot go much lower," he said.

But Mr Brewer believed returns on containers purchased at today's prices will improve over time, especially if interest rates and/or new container prices rise.

"Our fleet has grown seven per cent over the past 12 months to 3.2 million TEU and our owned fleet has grown 11 per cent in the last 12 months.

"While lower rental rates impact per container profitability, our growing fleet, declining cost of funds and higher utilisation have offset this decline and allowed us to continue to deliver solid performance," said Mr Brewer.

Textainer said its third quarter results benefited from higher revenue due to an increase in its owned container fleet size and an increase in utilisation.

Textainer also benefited from lower interest expense primarily due to interest savings from the refinancing of debt earlier in the year.

"These factors were offset by an increase in depreciation expense due to the larger owned fleet and lower gains on sale of containers," the company statement said.